Corporate Reference Group Meeting in Oslo

Minutes from

Corporate Reference Group Meeting in Oslo

27 January 2003

Participants:

Nigel MassonP&O Nedlloyd

Andrew MooresP&O Nedlloyd

Andreas MallShell

Birgitta BjörkstromElectrolux

Pascal SpittlerIKEA

Michael CroonIKEA

Stein FosmoNorsk Hydro

Nils RuudNorsk Hydro

Rens NooyensPhilips

Robert BolPhilips

Siri-Anne dos Santos of Norsk Hydro is absent for health reason.

Ingemar Rudäng of Ericsson apologised for not being able to come for business reasons.

______

Minutes of CRG meeting in October:

Minutes were approved with following items discussed:

-Discussion on developing a PAYEXT CRG standard closed, as banks have already implemented the PAYMUL and thus have adopted this standard. Besides PAYMUL can be used as if it is a PAYEXT by specifying a single payment order per debit-side (single C per B level).

-IBAN implementation looks still delayed as it can hardly be used for domestic payments in European countries.

Local Language Characters (LLC) in financial EDI:

The problem statement prepared by Robert Bol was discussed.

As an alternative to specifying names and addresses in LLC only, it was suggested to include both the name and address in Latin characters and in LLC. This would also solve the issue of “approval of payment” and fraud prevention, which require the name to be readable.

P&O currently uses the HSBC-solution offered by banks in APAC, where banks maintain a separate name and address file in LLC (changes and additions sent by fax), the vendor-number is the link with the beneficiary in the payment order.

For printing cheques and remittance advices, the bank takes the name and address from this file.

HSBC has started a project called “Lionheart” to print remittance advices in LLC. Contact Mark Sutton.

TBG5 meeting in Rome has initiated a small working group to define the issue of LLC in more detail and come with a proposal for solution. Tim Decker of Citibank and Robert Bol will take initiative. From CRG Nigel Masson and Pascal Spittler want to participate. Other global banks will be contacted.

CRG communication and website.

Hendrik Muus of Stuzza has offered in the TBG5 meeting to come with a proposal for a TBG5 website (a.o. for the Core Components directory, the Annual Report of TBG5). This should also accommodate CRG data.

Andrew Moores offers to host the CRG website on the server of his software house, but preference is, to wait for the TBG5 solution.

An issue is: who will maintain the contents?

CRG compliancy.

When implementing the CRG PAYMUL with more banks, it becomes clearer that it is not enough to define the MIG at the current level to come to a real standard.

As different interpretations are possible, implementation with every bank requires discussions on how to interpret the rules.

Examples:

-is DTM+203 requested execution date binding? Reject if not possible or execute on best effort basis?

-Some banks determine the payment method based on the requested execution date, others require explicit indication of RTGS or ACH.

-Does the BUS segment with IN or DO determine the residency?

-BUS segment (recommendation: not used) is required by some banks.

Corporates should define a more detailed standard on the website, with indications what is mandatory, what is a guideline or what is considered as a temporary work-around (like BACS-id in NAD+OY).

Nigel Masson sends around what has been refined as the P&O standard based on discussions with multiple banks.

CRG should publish both “standards” and experiences, which might gradually improve how banks operate and ease implementations for Corporates.

Intelligent Property Rights to be agreed with banks if part of agreement details.

European Payment Commission (EPC) is working on a document called “Common Market Practices” for Pan-European ACH (PEACH).

Modifications of PAYMUL subset.

In Den Haag some changes were agreed but not yet published on the website.

Robert Bol will contact Ingemar Rudäng.

CRG Chairman.

CRG chairman Ingemar Rudäng has informed the meeting that, because of the situation in Ericsson, he is unable to contribute to CRG anymore.

A new chairman has to be elected. Andreas Mall is willing to be the chairman, as far as his activities in TWIST allow him. Siri-Anne dos Santos remains vice-chair.

The participation of the corporates has changed and will change in future, dependant on the phase of development and implementation of financial EDI systems. (IBM, GE, Siemens, CocaCola no longer are active members).

As soon as other corporates are active and feel positioned to chair the meeting, Andreas Mall prefers that someone else takes over.

CRG activity focus.

Instead of defining message subsets, focus will be more on “usage guidelines”, ways of working and exchange of experience. Terms of Reference of CRG must be defined.

The question came up, if banks should be involved in this phase. Banks already question if the CRG is a good representation of Corporate clients.

Currently the following banks are in the process of implementing CRG-PAYMUL: Citibank, JPMorgan, ABNAMRO, Standard Chartered, SEBanken, SocietéGeneral, HSBC. Open for future discussion.

TWIST.

Andreas Mall gave a presentation on the TWIST initiative, which now also focuses on Commercial Payments. The group seeks alignment with other standard initiatives like FpML, SWIFT, MDDL.

Existing specifications of Rosettanet (extended remittance advice), SAP (new IDOC format) and SWIFT (ePLUS) are used.

Impressive is the involvement and support of all market-parties.

The message flows for different payment scenarios have been modelled. Next step will be to determine which messages will be developed first. From this discussion it became clear that TWIST will give priority to missing EDIFACT messages: often low frequency messages that are processed manual, like cancellation and returns.

On the question of Andreas if CRG supports the TWIST initiative for commercial payments, the answer was positive under the condition that TWIST focuses on “gaps” in the message flow end-to-end. Andreas will distribute TWIST results to the CRG mailinglist for review and comments of Corporates.

Harmonisation UN/CEFACT and SWIFT.

A draft positioning paper has been distributed, (both in the TBG5 meeting in Rome and in the CRG meeting) in which both organisations express the will to harmonise the development of standards. Comments to this paper were discussed. Any contribution to improve the document can be sent until Feb. 10 to Stig Korsgaard ().

Formal position is, that highest levels in both organisations have to approve the way forward, UN/CEFACT in March, SWIFT-Board in June.

In the mean time the analysis of differences in methodology and results by technical specialists will take place.

TBG5 subworking group on security and authorisation.

In Rome a working group on security was established, where also representations from corporates are desired. Provided the activity is limited to a 1-day, result-oriented meeting, the following corporates want to participate:

-P&ONedlloyd (Andrew Masson, will prepare a meeting document)

-IKEA (name to be determined)

-Shell (name to be determined)

-Norsk Hydro (Nils Ruud).

For the working group on Authorisation the suggestion is, that banks first come with an analysis and proposal, which can be discussed in the CRG.

With Holding Tax.

Robert Bol has distributed a provisional analysis of the data elements required in Thailand and Philippines for WHT. He will work out a proposal how to include these elements in the PAYMUL message, both in case the payor prepares all required documents and in the situation that this is outsourced to the bank.

Andreas promises to send Shell’s implementation and the requirements for Pakistan.

Next meeting.

In order to speed up the process of delivering results from the CRG, it was decided for monthly conference calls.

The first call will be on the proposal for PAYMUL usage guidelines, which will be sent to the complete mailing list by Andrew Masson of P&ONedlloyd. Anyone having comments on this document can send it to the mailing list as well.

In order to know how many will participate in the call, participants have to subscribe to the conference call a few days in advance, in response to an e-mail message from the call-host.

First conference call on March 5, at 14.00 CET, hosted by Philips.

Next conference call on April 9, at 14.00 CET, host t.b.d.

On May 14 next CRG meeting at IKEA in Basel.

Robert Bol

Philips Corporate Treasury

2003-02-06

Minutes CRG meeting Oslo, 27 January 2003 page 1